Synagro Recovery Plan Approved With $480 Million Sale

Synagro Technologies Inc., the largest biosolids and organic residuals recycler in the U.S., won approval of its restructuring plan, completing a $480 million sale to private-equity firm EQT Infrastructure II LP.

U.S. Bankruptcy Judge Brendan Linehan Shannon, at a hearing today in Wilmington, Delaware, granted approval of a reorganization plan that includes the deal with Stockholm-based EQT, which provides about $465 million in cash to distribute to creditors.

“The plan was widely accepted” by almost all creditors George N. Panagakis, a lawyer for the company, told Shannon.

Shannon agreed the case had been resolved on a “largely consensual basis.”

The plan is expected to be effective on Aug. 22.

Carlyle Group LP, the world’s second-biggest private-equity firm by assets, acquired Synagro in 2007 for $462 million plus the assumption of $310 million in debt.

Synagro, based in Houston, filed for bankruptcy protection in April, following several renewable-energy companies into court protection as they struggled to turn environmentally friendly energy initiatives into profits.

Synagro serves more than 600 municipal and industrial water and wastewater facilities, it said in a statement. The company processes waste to produce products including fertilizer and fuels. The company was founded in 1986, and has 800 employees in 34 states from Connecticut to California, according to its website.

Restructuring Plan

Under the restructuring plan, lenders owed about $316 million will be repaid in full, as will unsecured trade creditors owed as much as $16.9 million.

Other lenders with a secondary priority of repayment will have at least $45 million in allowed secured claims, according to the disclosure statement, an outline of the plan. The lenders are projected to recoup about 88 cents to 90 cents on the dollar on those claims. They are projected to recover at most 1.2 percent of the remaining $57.4 million to $60.4 million in unsecured deficiency claims, according to court papers.

General unsecured creditors, owed from $500,000 to potentially $20 million, are projected to recover as much as 10 percent if the claims fall at the low-end and less than 1 percent if at the high-end, court filings show.

The case is In re In re Synagro Technologies Inc., 13-11041, U.S. Bankruptcy Court, District of Delaware (Wilmington).

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